Financial Aid Definitions
Application Deadline — The institution's application deadline date for students applying for financial aid.
Consolidation Loan — A loan that combines several student loans into one bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans.
Cost of Attendance — The calculated cost of attending the institution, which includes transportation, room/board, tuition/fees, supplies, books, and other expenses. COA is then used to determine eligibility for financial aid.
Deadline — The institution's application deadline date for students applying for financial aid.
Default — Defaulting on a loan is when the borrower fails to make an installment payment or meet the terms and conditions of the loan, provided the failure persists for 180 days.
Deferment — When the borrower is allowed to postpone repayment of the loan for a specified period of time.
Estimated Family Contribution (EFC) — The amount a family is expected to contribute toward the Cost of Attendance as determined by the Federal Methodology need analysis formula. The EFC includes the parent contribution and the student contribution, and depends on the student's dependency status, family size, number of family members in school, and taxable and nontaxable income and assets.
Federal Methodology — A formula used to calculate the amount of money that you and your family are expected to pay for college. This formula, established by Congress, is used nationwide for all students. The most important factors in the formula are the income, assets, and net worth of your parents; your income and assets; and the size of your family.
Federal Subsidized Loan — A loan on which the government pays the interest while the student is in school, during the six-month grace period, and during any deferment periods. Subsidized loans are awarded based on financial need.
Federal Unsubsidized Loan — A loan on which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school.
Financial Aid Package — The total amount of financial aid a student is to receive. It may include grant, Federal Work-Study, and loan funds from a variety of sources; and it is assembled by the school's financial aid office.
Free Application for Federal Student Aid (FAFSA) — A free application that must be completed by all students and parents who apply for federal student aid.
Full-Time Student — Students enrolled for at least 9 credit hours per semester or its equivalent at the graduate level. Does not include audited courses.
Independent Student — Any student whose parents have surrendered the right to his/her care, custody, and earnings; do not claim him/her as a dependent on federal or state income tax returns; and have ceased to provide him/her substantial financial support. Also any student in a graduate or professional degree program.
Interest — The fee charged to borrow money. Interest charges are in addition to the principal of the loan.
Part-Time Student — Students enrolled for fewer than 9 credit hours per semester or the equivalent at the graduate level. Does not include audited courses.
Perkins Loan — Formerly the National Direct Student Loan Program, the Perkins Loan allows graduate students to borrow up to $5,000/year (6-year maximum). The Perkins Loan has one of the lowest interest rates of any student loan. It is awarded by the school's financial aid office to students with exceptional financial need. The student must have applied for a Pell Grant to be eligible. The interest on the Perkins Loan is subsidized while the student is in school.
Personal Expenses — Part of the calculated student Cost of Attendance that includes the estimated student cost of personal effects such as laundry, toothpaste, etc.
Principal — The amount borrowed by the student before interest is charged.
Promissory Note — The legal document signed by the borrower prior to receiving a loan. Besides containing a promise to repay the loan, it lists the conditions of the loan and terms for repayment.
Student Aid Report (SAR) — The SAR summarizes the information you included on the FAFSA. The SAR will tell you your EFC and whether you are eligible for a Pell Grant. You should receive your SAR four to six weeks after you send your FAFSA to the processor.
Tuition/Fees — Amount of money charged to students for instructional or other services. Tuition may be charged per term, per course, or per credit.
Unmet Need — The amount of need remaining after Estimated Family Contribution, gift aid, and self-help are subtracted from Cost of Attendance.